Amazon wants to take over the apparel industry

Photo: Graham Denholm/ Getty Images.

Amazon is detemined to take over the apparel industry.

The brand is scooping up talented people in the fashion world for roles on its merchandising teams. And now, there is widespread speculation the brand will start its own clothing label.

“When we see gaps, when certain brands have decided for their own reasons not to sell with us, our customer still wants a product like that,” Jeff Yurcisin, Amazon Fashion’s vice president of clothing, said at
a conference in October.

But Amazon’s foray into apparel retail won’t come easy.

For starters, the entire clothing industry is in crisis.

Macy’s is closing 40 stores in the beginning of this year. Nordstrom just reported disappointing earnings. And once-beloved mall stores like Abercrombie & Fitch and Aeropostale are struggling to stay relevent.

Analysts at RBC Capital Markets believe that these struggles are part of a larger trend in retail, as more customers shop online instead of in stores. Shoppers are also increasingly unwilling to shell out for expensive apparel, deciding instead to spend their money on electronics and restaurants.

Beyond overall challenges in the industry, it’s unclear what consumer segment Amazon will sell to.

Amazon initially wanted to be known as a luxury retailer, but has since transitioned to the mass market.

Amazon backed away from courting luxury brands like Chanel, Dolce and Gabbana, and Gucci, Jennie Perry, chief marketing officer of Amazon’s fashion division, told Business of Fashion last year.

“There has been lot of speculation on us entering the luxury market and that is just not something that we’re focused on right now,” Perry said. “What we are focused on is developing an experience for our large customer base. That customer seems to have a great appetite for many things.”

Instead, the company has secured partnership brands mid-tier brands such as Lacoste and Theory, according to Business of Fashion. The fashion site also noted Amazon is focusing on enhancing the user experience, as Amazon’s front-end is not tailored to suit selling high fashion products.

For years, the brand has worked arduously to gain a credible reputation within the fashion industry.

In 2012, the massive e-commerce company set up a warehouse for photography in the trendy neighbourhood Williamsburg in Brooklyn, hoping to woo luxury fashion companies and their loyal followers. With Cathy Beaudoin as president of Amazon’s fashion division at the helm, this has been an apparent part of its mission.

Luxury brands, however, have not been intrigued.

“Amazon will never sell Louis Vuitton, because we are the only ones that sell it,” Louis Vuitton cheif executive Yves Carcelle told Vogue UK in 2012. “This is a model of direct control that we pioneered, and I think long term it is the direction that most luxury ecommerce will take.”

Despite Amazon’s efforts, becoming a force in the apparel world will be a huge challenge.

Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.

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